The United Automobile Workers’ Union, which has been striking the established U.S. auto companies for more than a week now, has pierced a supply line that is still recovering from the pandemic.
Negotiations between the companies and unions are still at a standstill. The U.A.W. The partnership could extend its strike to other locations as early as Friday. The length of the strike could have a significant impact on the autoworkers, as well as the three companies — General Motors, Ford Motor, and Stellantis (parent company for Chrysler and Jeep). The work stoppages may also hurt drivers, auto dealers, and suppliers of auto parts.
A long, expanding strike will decrease the number of cars available on dealer lots. It will also make it more difficult for people to fix their vehicles.
The economic damage is limited so far because of the U.A.W. The U.A.W. has only affected a few plants and warehouses. However, the damage could be worsened if it spreads to more places and lasts for weeks or even months.
The economic impact of the U.A.W. As we approach the two-week mark, the economic spillovers from the U.A.W. We are noticing some layoffs in automotive suppliers, from seat manufacturers to steelworkers. These impacts are expected to increase as the strike continues, and more targets are announced.
The union began walkouts in assembly plants to protest popular models like the Ford Bronco and Jeep Wrangler. On September 22, the league expanded its strike to include G.M. The strike was extended on September 22 to include parts distribution centers at G.M.
Dealers will likely increase prices as these popular models become scarcer.
Jeff Rightmer is a supply chain management professor at Wayne State University. At this point, it’s unlikely that they will be able to get back the production.
According to Cox Automotive, new-car sales will rise in this month despite the strike, high interest rates, and other factors.
G.M. G.M. Ford had enough vehicles and trucks to last 74 days. Stellantis, on the other hand, had more than 100 working days in three of its four divisions. Jeep had less than 100.
Wes Lutz is a Chrysler, Dodge Jeep, and Ram dealer who lives in Jackson, Michigan.
He is getting his cars from other factories, including large pickups imported from Mexico. He is concerned that a strike that continues could affect the availability of other models.
Lutz says that a bigger worry is the fact that strikes at G.M. Mr. Lutz said that the strikes at G.M. He stated that he worked with other dealers in order to exchange spare parts to keep the service departments running.
The most profitable part of a car dealership is usually the service and repair department. Pat Ryan, CoPilot’s chief executive, says that service departments can pay for most of or even all the dealership costs.
A parts shortage can be a greater blow to dealers than a lack of vehicles. Some dealers will suspend repairs and lay off mechanics if parts are scarce for several weeks or even months.
Strikes could also affect companies that produce parts and components for new cars, such as batteries and mufflers. According to Resilinc, a company that monitors supply chains, the strike could affect nearly 700 auto suppliers.
C.I.E. Newcor (an auto component maker) informed workers on September 21 that they expected to lay off 300 employees in four Michigan plants beginning October 2. The length of any potential U.A.W. strike will determine the extent of releases. The company stated in a regulatory filing that the strike by Detroit 3 would be “determined by the length of any potential U.A.W.
Many automakers practice “just-in-time” production. This means that materials and parts are sent to factories only when they are needed.
Ann Marie Uetz is a Detroit partner of Foley & Lardner, a law firm that represents auto suppliers. There is definitely a strain on the supply chain. If the strike continues for more than a month, you will see some suppliers suffer.
